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Westpac And CBA Achieve Dominance In Mortgage Market
Australia’s largest bank by market value Westpac, and its biggest mortgage lender Commonwealth Bank of Australia (CBA) have effectively cornered Australia’s market for new mortgages by writing more than 85 per cent of new home loans made by the banking sector between them.
The market share of both banks means that the combined mortgage book of the two lenders now exceeds $500 billion for the first time ever.
The figures, which come from a new report released by market research firm CoreData, show that of the $35.6 billion in new home loans made during the last quarter, Westpac and CBA, coupled with their recent acquisitions of Bankwest and St George respectively, wrote 85.2 percent of all home loans or $30.3 billion.
The level of dominance in the mortgage market by just two financial institutions has stoked the concerns of the Australian Competition & Consumer Commission, with its chief, Graeme Samuel indicating there was growing concern over the state of competition between the Big Four banking groups and their smaller regional rivals.
Mr. Samuel said “no one concerned with competition that would say the current situation is healthy”.
The report showed that the merged entity of Westpac/St George marginally achieved the fastest growth in its mortgage book writing $15.2 billion in new loans, whilst the combined entity of CBA/Bankwest grew its mortgage book by $15.1 billion.
Westpac/St George nearly doubled its mortgage lending growth rate from the previous quarter, having grown its mortgage book by $7.7 billion for the quarter ending March. Between Westpac and CBA, the two lenders now account for just under half of all outstanding Australian mortgages as measured by value. The enlarged CBA accounts for 25.2 per cent of the market or $260 billion, whilst its nearest rival Westpac accounts for 23.3 per cent or $241 billion.
The figures come days after Australian Prudential Regulatory Authority statistics showed the big four banks dominating deposits and home lending.
By comparison, National Australia Bank (NAB) and ANZ combined have 25.5 per cent market share. NAB has a mortgage loan book of $133.9bn and the ANZ $130.4bn.
CoreData principal Andrew Inwood said the regional banks, in particular, needed to reinvent themselves after recently trying to match big banks in cutting mortgage interest rates.
“Competing with CBA on price is like trying to compete with Walmart on price,” he said. “The regionals should be focusing on their ability to take care of customers in a way with which the big two can’t possibly compete.”
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Westpac And CBA Achieve Dominance In Mortgage Market : money-au.com.au…
The figures, which come from a new report released by market research firm CoreData, show that of the $35.6 billion in new home loans made during the last quarter, Westpac and CBA, coupled with their recent acquisitions of Bankwest and St George respe…